Gold was flat in a narrow range on Thursday, first dipping as the dollar rose and then rising as the dollar moved lower, but bullion`s gains were limited by higher U.S. Treasury yields.

Financial market players were concerned about a possible U.S. government shutdown, but this did not move gold very much.

Spot gold was unchanged at $1,327.61 an ounce by 1:49 p.m. EST (1849 GMT). Earlier in the session, it touched its lowest since Jan. 12 at $1,323.70.

U.S. gold futures for February delivery settled down $12, or 0.9 percent, at $1,327.20 per ounce.

In the previous session, spot gold fell 0.8 percent, its biggest daily percentage decline since Dec. 7 as the U.S. dollar bounced from three-year lows.

"We’ve seen the relationship between dollar and gold hold pretty steady," said Chris Gaffney president of world markets at St. Louis-based EverBank.

In early trade, the U.S. dollar index fell on worries over a possible U.S. government shutdown as global investors sought to diversify their holdings into other currencies. Shortly after, the greenback recovered some of the losses.

The 10-year U.S. Treasury yield hit its highest since March 2017 at 2.61 percent in European trade, pushing euro zone counterparts higher. Gold is a non-yielding asset so rising yields on the bond market pressure its price.